Barry Silbert is Back: The Next Big Crypto Bet

29:21good and bad and lies. And I had never experienced a situation where there was such a willingness, and it wasn't just directed at us, but there was such a willingness for people to make up things and for people to believe it and amplify it. And so that was really surprising, especially, look, given all that we have done for the space, I was surprised that there was such kind of vitriol, like kind of pointed in mine or our direction. You know, getting a lot of death threats during this for something that I had nothing to do with was surprising. Two, I was surprised at how litigious and how regulators wield their power in ways that I just didn't know that that was the way that the world kind of works.

30:17And so I have a fresh new perspective as to and maybe this administration's hopefully this administration's kind of different. But with certainly previous, it was like, wow, is this really happening? But look, on the positive side, I had a team of people who were like, we're in this bunker with you. We're going to we're going to fight through this and we're going to come out stronger on the other end. And so when you talk about valuing people's contributions and loyalty and culture and team, I mean, we are the exact same team for the most part that we were on June 11th than we are today. And that's empowering.

31:00I know that I've got the business and the team and the model that's going to get through any shit that gets thrown our way. Now, I don't know if we talked about this when I saw you in the fall, but also during this period of time, my daughter was diagnosed with cancer. So while we're working through this and people are trying to assassinate my character online and sometimes threatening a person, I'm at the hospital while my daughter is going through chemotherapy and having surgeries. And so it was... How did you mentally survive that? um it was um uh an amazing wife an amazing team um and um you know trying to put everything in life in perspective and uh yeah like what what what what doesn't kill you makes you stronger and like in the in the middle of it um it was it was it was hard to see how both would turn out but thank God my daughter is nine months cancer-free right now and DCG is kicking ass.

32:10Well done. So when we caught up, there's Barry newly excited because you're always a guy who looks into the future and says, there's something going on here and I want to be involved, right? You were super early to Bitcoin. You were super early to a lot of the companies in the space. You were super early to other cryptocurrencies. Seeing something early tends to be what you managed to do. And AI comes along and suddenly it grabs your focus thinking, okay, where is the nexus between this and blockchain technology? And it's now kind of become your true focus right now. So talk me through this and your realization of, okay, there's another big opportunity lining up and you want to be involved.

32:52It's an evolution in that over the past 12 years, 13 years since I first bought Bitcoin, I've always been intellectually curious about everything else that's coming out of our space. And I think for the most part, 99.9 % of crypto tokens that are out there have no reason to exist and are worthless. And so my bar for getting excited about something is really, really high. And so over 10, 12 years, certain things have gotten me excited and we put somebody to work and, you know, some of, you know, many have worked out, some haven't. But, but over the past couple of years, as AI has become a theme and as I have come to appreciate the power of AI, I mean, you know, I'm a, I'm a markets guy, a finance guy.

33:47I'm, I'm impressed with your ability to kind of be, you know, kind of an AI pioneer as well as being a markets and finance guy. For me, I had a bit of an epiphany as to, well, I caught up with the rest of the world as to, okay, AI is going to be a big thing. And it just so happened that folks on my team were introduced to a couple of individuals who had written a white paper about something called Bitensor in 2021 that they got excited about. And I started looking at the intersection of crypto and AI. And I think a lot of the early applications were kind of using crypto as like a payment kind of solution for AI, less so kind of building infrastructure to build AI on top of.

34:41So I started looking across the whole decentralized AI space. I started digging in on Bitensor. And I very quickly came to the conclusion that from a theme or era perspective, you know, this was the next big era for crypto. You know, you had the Bitcoin and Ethereum and you had NFTs and you had like Layer 2s and DeFi. I think this is the next big, big investment theme for crypto. And there's a number of projects that have launched. We've backed a number of them. But the one that over the past year, year and a half, that it's a reach escape velocity is Potensor. And so I decided last year we're going to do with Potensor, try to do with Potensor what we do with Bitcoin.

35:27We are going to invest in it. We're going to build on it. We're going to help educate, create awareness, create access. and we launched a new business in the fall last year called Yuma that I'm putting my jersey back on and I'm the CEO of Yuma. I'm still running DCG, but I'm back in the game and I'm now building this business Yuma that's focusing exclusively on this thing, Bitensor. So tell me, talk to me about Bitensor first. What is the, I think the guys have been on there's an already but just give people the overview and then what it was specifically about them that got you interested yeah so uh if you ask five people what is the answer i tried to ask you and them when i saw you and i'm like it's still complicated it's it's complicated so so if you ask five people you're going to get 15 answers so i'm gonna but but here's the thing it's just like bitcoin in 2012 if you ask five people of bitcoin you're gonna get five different answers It's digital gold.

36:28It's a blockchain. It's payments. It's global money. What Bitensor is, is a decentralized network for intelligence. And the idea of Bitensor is to create this global permissionless platform on which any problem, any challenge can get solved by incenting the world's global intelligence to solve that problem. And the incentive is this crypto token. So the way that I have described it to non-crypto people that I think is the easiest to understand is the way that the Internet and the World Wide Web was the Internet of information. uh the tensor is building the worldwide web of intelligence and so the way that the tensor works is uh anybody can launch what's called a subnet on top of the tensor uh and these are specific problems that are trying to be solved by harnessing the the global's the the the the the the global intelligence and so it could be compute it could be inference it could be data it could be training and pre-training.

37:44It could be there's sub-mets that have been launched to predict the price of Bitcoin, to predict sports scores. And so in the way that 30 years ago with the internet, when Mosaic, when the browser was launched and it created this Cambrian explosion of websites, before that you would access the internet via Prodigy and America Online, you know, kind of akin to today's like, you know, open AI and Claude, the tensor is ushering in the whole new era of openness and permissionless innovation. And it's exploding right now. And so who are the kinds of people who are on these subnets and on the network itself?

38:29Are there people who are providing data and then monetizing that, monetizing their compute? How do people hear about it? And what is it attracting as an ecosystem? So you had asked the question, you know, kind of what got me excited about it. And a number of things got me excited about it. One is, it's such a refreshing change to be surrounded by people who are mission driven, ambitious, who are trying to solve the world's problems. And crypto is a mechanism to do it. But it's not all about crypto. It's not about number go. It's not just about number go up. It's okay. How do we address these problems that can only be solved for by incentivizing the world to help you kind of solve these problems.

39:10And so when I met the founders, the writers of this white paper, I like everybody was inspired by them. That's number one. Two is Bitensor was launched. It was a fair launch. It's just like Bitcoin. It was a white paper that was then turned into code that then launched. So there was no VC round. There were no allocations to foundations or team members. So everybody that is in Bitensor right now got there by being genuinely interested in the technology and buying or earning TAU, the token. So you have this organic community that is formed, that is mission driven, that is ambitious, that has kind of earned their way into having a seat at the table.

39:55And by the way, it has the same token economics as Bitcoin. So it's got 21 million cap. It's got the same having concept as Bitcoin. So it's very, very easy to understand. And what has happened over the past few months has been a called an upgrade of the tensor, where the subnets that we just talked about, each one of those subnets actually now have a token. And so people can now. So that's sort of like layer twos. It is, but it's not in a very important way. The distinction is, is every single subnet token is traded in and out of TAL. So your functional currency, your denominator currency for all the subnet tokens is TAL.

40:44So as people are trying to speculate as to which of the subnets they think are generating the most valuable intelligence, when they buy the subnet token, they're essentially indirectly buying Tau. Because all the, these are, it's traded out of liquidity pools. So you have, there's 88 subnets right now. And the one's launching every two days. So you have this community of builders, 88 different teams for the most part, who are trying to solve a problem, but they're all like joined arm in arm. Because at the end of the day, If they can drive utility of Potensor and Tau, if they can attract capital into their subnet token, it just flows into Tau.

41:29So two subnets may be doing the exact same thing, and one of them may just kick ass. If that subnet can bring in hundreds of millions of dollars into the Potensor ecosystem and that subnet token skyrockets in value, that other subnet, their token in U.S. dollar terms is going to go up as well because of the success of those subnets. And so it's a very collaborative community. And I'm unaware of any other projects in crypto that has the same dynamic. Because if you think about any tokens that launch on Ethereum or Solana, essentially no value accrues to Ethereum or Solana. I mean, you have transaction fees, but ultimately those teams are all about, okay, I want to create value for my own token.

42:08They don't really care ultimately whether or not Ethereum or Solana is successful. No, it's closer to NFTs, which are priced in ETH. Right. That would be the closest analog. Exactly. And it's early stage. What kind of people are in the ecosystem? Is it all kind of wide-eyed, super smart crazies where things normally start with? These people are like, oh, wow, I've discovered this new. Who's in it? And what are they? I know it's relatively broad and deep, but give me an idea of how big this ecosystem is and what kind of people are involved. For Bitcoin OGs, we are circa 2012, 2013 right now. And look, if the price is any indication of kind of where it is, the price of Tau, it's like 200 bucks right now.

42:52So if you kind of look at like in the history of Bitcoin. What's the market cap? It's one and a half billion or so. Right. Okay. Yeah. And so you have, in the same way that the early pioneers in Bitcoin were more kind of libertarian leaning, which some people would call me and them crazy. But, you know, that was a philosophy, is a philosophy. In Bitensor, it's really more AI crazies. yeah um and and and so i met and they're very technical people and they're all different backgrounds all different backgrounds but legitimate backgrounds like legit and and and so that's inspiring so you spend time with individuals that are building the subnets and then what what's happened really over the past couple months is there's a real explosion of the infrastructure that's being built to make um either the intelligence that's getting spit out of these subnets accessible or monetizable.

43:49There's an explosion in the applications that are being built for people to discover subnets and to invest in subnets, to track subnets. And as we're kind of going through this market correction right now, there's this small community of people. We're all just kind of heads down doing our thing at Bitensor and things are growing really fast. And people are, generally speaking, not being distracted by what's happening with crypto and the macro stuff. Because it's almost too early to matter right now. First, you've got to build shit. We all want to move faster. We want to do more. We want to, you know, we want to, we want to, we want to, we want to, before the world discovers this, we're all trying to properly position the businesses that we're building and investing that we're doing before the world wakes up to this amazing thing that's being built.

44:35So how I guess you're thinking about it right now is like early stage build of EVM where it's all developers. It's the building out of use cases, what's happening, as opposed to token activity, retail investment, total value transacted. It's too early for that, right? It's too early, and the infrastructure isn't even there yet. Right now, if you want to buy subnet tokens, you need to own Tau. and there's, you know, half a dozen sites you can go to where, you know, it's not quite as bad as Mt. Gox, but it's kind of like that early clunky, I want to express, you know, my view. So Grayscale launched a product for it.

45:17So there's the Grayscale Bitensor Trust. So again, just the playbook. So just like what we did with Bitcoin in 2013, we're doing the same thing with Bitensor. And Yuma that would build it, the business that we're building, one of the areas we're really focusing on is how do we make subnet investing more accessible to a larger group of investors who don't necessarily want to, you know, stake or swap or who don't care what a Uniswap pool is and will never care what it is. But they just want to make a bet on what they think is going to be the next Amazon of the World Wide Web of intelligence. So when you're looking at doing layering investments on top, using the playbook, is it the equity side or the token side or both that you're looking at?

46:08And what kind of opportunities you focused on at this stage? Is it infrastructure? And how are you thinking about this? I generally hate any projects that are trying to create enterprise value or value for both equity holders and token holders. Yeah, it's weird. Yeah. And so we really do try to be focused and disciplined on either investing in the subnet tokens or we're investing in Tau, which again is, you know, subnet tokens is kind of indirect way to play Tau. Or we're investing in businesses that are building, you know, I want to, I'm looking for the Coinbase of Bitensor. That's what I'm looking for now.

46:55I'm looking for the BitGo of Bitensor. I'm looking for the chain analysis of Bitensor. And so our investing is infrastructure, it's subnet tokens, it's Tau itself. and then with the business with Yuma that we're building, we just want to be an easy way for people who want to access the Tensor. If they want to build a subnet, we've launched an accelerator. So if you have an idea for a competition that you want to run, where you want to incent the big brains of the world to compete, we will help you get that off the ground. If you own Tao and you want to stake it, you can stake it with Yuma. We're wearing a lot of different hats and we're, at the end of the day, it's all to advance the vision and the mission of the tensor that the founders have created it also has a feel of bitcoin mining about it where you're you're bringing your hardware and your computes to secure the ledger in which you get rewarded for it here we're going to be different people bringing different aspects to it whether it's data whether it's compute whether it's inference all of these things right well i'm so i'm so happy that you brought up that that example Because take a step back.

48:08Today, annually, there's about$12 billion of Bitcoin that gets emitted annually to the miners. And that$12 billion is being spent to secure the Bitcoin network, which is great, super important. Does it need to be$12 billion? Probably not, but it is. But Tensor is instead taking those economics and using it as an incentive to pay the providers of the compute, the owners of the models, the owners of the data. The network infrastructure, as it were. Exactly. He's decentralized. Right. And so today at the current Tau price, it's about$500 million that is up for grabs in Tau that's made available to all of these different stakeholders.

48:57And so as the price of tau goes up, that$500 million becomes$1 billion, becomes$5 billion, becomes$10 billion. And all of a sudden, you're talking about real money to create this amazing incentive for whether you're a large enterprise or you're a grad student at night in your dorm trying to figure out how best you can contribute to the Bitensor network. It's a very powerful concept. Is it so decentralized that it's impossible to go to, let's say, universities and use their compute or for them to use this network as a way of accessing intelligence? How does that process work of bringing people in outside of word of mouth from one geek to another in AI?

49:40So there's no company behind Potensor. There's no foundation. There's a foundation that is mainly focused on building kind of the right, doing the core code. But at the foundation of the process of basically being dismantled to make it fully decentralized. So what you have is you have like all the listings that have happened for Tau, like every place that Tau has been has been listed has been done, you know, either because the exchange recognizes, hey, this is an asset we want to trade. Or there's somebody who has called, you know, the head of listings at these exchanges every day saying, list Tau, list Tau, list Tau, as opposed to writing a bunch of checks to kind of have something listed.

50:20And so you have the community that's driving this forward. But to answer your question, each one of these subnets, each one of these ADA subnets, there is a team behind it whose sole job is to, okay, I'm going to launch a subnet to create some kind of intelligence that is going to basically be commoditized, not commoditized, but like monetizable. and then it's their job to then figure out, okay, who is my end customer? So that's the output. And then they also want to make sure that if you have the ability to compete, if you are somebody who has the compute, access compute or the data, there's all, they, they need to make sure that you know that, that, that, that party knows that, Hey, here is a subnet that you could compete on and get paid to do it.

51:09So all of that access compute, all of that stranded data, all of the models that are being developed and tested. But Tensor is a place where today you can go there and start to monetize it. Of course, you're getting Tau, but it creates this flywheel effect where you have this entire community that is, like I said, arm in arm, trying to build better subnets, create better intelligence, monetize that intelligence, and drive this worldwide web of intelligence forward. And how are they going to deal with or how's that community going to deal with the fact that intelligence is almost going to zero in cost because of the massive warfare between all the major AI competitors, including China, plus open AI, plus everybody else perplexity or whoever?

52:01I think it completely validates the whole Potensor model. Think about the internet. At the time when you access the internet via America Online and Prodigy and CompuServe, and all of a sudden the browsers launch and you can now get the exact same thing for free that you are getting via Prodigy America Online, this is what Potensor is enabling. So whether it is cheaper, faster access to compute or cheaper, faster access to models or cheaper, faster access to data by leveling the playing field and making it accessible to anybody in the world is what is going to enable the creation of the Ubers and the Airbnbs and the TikToks and the businesses that were built on top of the internet that you could have never have imagined Uber in 1995.

52:49And then you don't have a single point of failure, which is the API from OpenAI or the API from Meta, Gemini or whatever. And you certainly have the redundancy scalability, but you also have there is no gated access. There's no censorship. It's just like the Internet and the World Wide Web of information. You're opening up this intelligence to the world. And now it's up to the teams to figure out how am I going to use this intelligence that's being generated as a way to pay my bills and to monetize. And it's very cool because in Bitensor, you're seeing subnet teams working with each other. You're seeing applications being built on top of a number of subnets where they're pulling intelligence from different subnets and creating a product that's then monetizable.

53:41where at the end of the day, for Bitensor to be successful, you will hopefully be using applications built on Bitensor and you have no idea that it was built on top of Bitensor. So there's an early vision that people share. Let's say the Bitcoin white paper, the peer-to-peer global cash system, right? That was not what it was in the end. So how do you think this changes? I want you to now go ahead five years, seven years, wherever it is, somewhere in the future where it's broader, deeper, more developed. What is this thing? Because it's probably not what you think it is today. It's not. The boldest prediction that I could make for Bitensor is it could be a better version of Bitcoin as a global store of value in that instead of spending the 10, 12 billion dollars a year that is spent to secure the Bitcoin network.

54:39Imagine if you spent that$10 or$12 billion to incent a global problem-solving network of people who are looking to solve major world problems. And if that$10 billion became$20 billion or$50 billion,$100 billion, think about the magic that could happen if you harness that. And again, I'm not suggesting that it's not valuable to spend 10, 12 billion dollars a year to secure the Bitcoin network, but it's got potentially got the exact same tokenomics as Bitcoin is having decentralized. So that's that's one thing of what it could be. But I could have never predicted Uber in 1995 that that would emerge.

55:29In fact, I saw the Uber deal when it was like a Seed Series A and I was like, that's a terrible idea. I wasn't going to get in someone else's car. So it shows you how much I know. But I do think that Bitensor, it has the religious feeling of the early Bitcoin adopters. but in trying to solve you know digital gold decentralized money you know eliminating government control over you know your your pocketbook trying to instead help help address major problems the world through harnessing global intelligence and it feels that the future of the internet is intelligence at scale and it feels that you know the one of the potential outcomes is this is not just about intelligence.

56:22It's just a decentralized internet's the wrong word, but... It's not even AI, honestly. No, it's not. This construct, and that's the thing is these subnets are being launched right now. I mean, some of them are directly AI. You know, it's inference or it's training or fine tuning. But these subnets, they're just a competition where there's essentially an incentive for people to compete. So anything that you want to try to get people to compete around, that's what the subnets are used for. Yeah, exactly. And so we literally have, we might think it's AI now, but we literally have no idea what this is going to be used for.

56:59It's for decentralized work teams to get incentivized for activity that they do on behalf of others. Yes. And have the incentive to work together. It's a coordination layer. Exactly. That's exactly right. Fascinating. So what's next for you? Just continuing to of look for companies in the space, invest in the space, trying to build this out? Yeah, we're building out, you know, UMA's team, you know, we're, there's just, there's a lot to do. It's a fast, it's a fast growing space. I still have my DCG hat on. And so I do still oversee all of DCG's investing activities. I'm still, I'm still going to die on the hill that privacy tokens and Zcash in particular.

57:42You've been shilling me those for years. It's, it's, I, I, I have never been as convinced that privacy tokens and Zcash in particular is we're going to wake up one day, people are going to realize financial privacy is important to them. And oh, wow, there's a version of Bitcoin that's private. How big is the, is the, the Tao trust so far? How do people find information about that? Which is obviously that, Is that part of DCG or part of Yuma? So it's actually Grayscale. So Grayscale has Grayscale Potential Trust. It's not yet publicly quoted, but all of the products become publicly traded. So stay tuned for that.

58:25But people who are accredited investors can go to the Grayscale website, go to Grayscale Potential Trust, click a few buttons, and then they can invest in the trust that way. uh and yuma um we will at some point um this year we'll be rolling out uh um uh product solutions for people to get exposure directly into the subnets themselves uh and so that'll be a that'll be a yuma solution amazing listen my friend super fascinating let's see where it all plays out um it's complicated to get your head around because it is very different to anything else and um i've always found that you've been very early in finding some of this stuff even though you've been dead wrong on zcash so far but well i'll come back uh well before the next five years and say look how right i was yeah just don't go back on twitter and say it's going to be a big week deal all right good to see you and i'll see you soon thanks so as ever fabulous conversation with Barry.

59:27Lots to unpack there. But the big thing is, look, it's very early in this kind of idea of distributed, decentralized, compute, AI, inference, all of these things. Most of us don't yet understand it. But Barry has always been early to big megatrends. And I take it seriously when he really dedicates himself to something. So it's something worth looking into, something worth thinking about and adding to your mix of where the future may go, where the future of the exponential age will lie. Anyway, I'll see you next time.

1:00:24impact of generative AI and much more. Get tickets at superai.com with promo code realvision for an exclusive 20 % off only while tickets last. If you like this episode, I'd love for you to head over to realvision.com forward slash join for a free membership. Start your journey today to unfuck your future just one click away. Have you ever wanted to trade Bitcoin, but haven't dared try? With Plus 500 Futures, you can trade crypto without the hassle of opening a wallet. With just a few clicks, you can register and start practicing with their free and unlimited demo. See a trading opportunity? You'll be able to trade it in just two clicks.

1:01:04Feel ready? You can move to real money with as little as$100 once your account is approved. And the great thing is that in addition to crypto, Plus 500 gives you access to a wide range of instruments, S &P 500, NASDAQ, gas, and much more. Explore equity indices, energy, metals, forex, and beyond. With a simple and intuitive platform, you could trade anytime, anywhere. Experience the fast, accessible futures trading you've been waiting for with Plus500. With over 20 years of experience, Plus500 is your gateway to the markets. Visit us.plus500.com to learn more. Trading in futures involves the risk of loss and is not suitable for everyone.

1:01:40Not all applicants will qualify. Plus500, it's trading with a plus.